Managing your money can create a lot of paper work, but don’t drain yourself with holding on to anything longer than you have to. If you’re like me and just want to know you have something “just in case,” then scan and save your documents in well organized folders on a computer you back up often or in a cloud based technology like Dropbox. If you opt for paperless or e-billing and receive your statements in your e-mail box, then there’s no need to scan. You can simply save your statements as a PDF and save yourself time, paper and energy!
Here are some tips on exactly when to toss old financial records.
1. Keep for a Year or Less:
Bank Statements – Review when you receive them. Look for unauthorized purchases, and keep the last three. If your self-employed, hold on to at least 12 months in order to prove your income for qualification purposes.
Monthly Bills – Review for accuracy but there’s no need to keep them for more than a quarter at the most.
Credit Card Bills – Review your bill for any billing errors. I suggest keeping these for at least six months, and indefinitely if you’ve used your credit card for business purposes noted on your taxes.
Paycheck Stub – I say you should always have your last three pay stubs. You never know when you’ll need to prove income for a loan or other necessity. Keep the last few in the year to compare against your W-2 or 1099. If it doesn’t match, go to your employer and request a change. Otherwise, you can shred them as your W-2 is good enough for filing taxes.
Insurance Policies – Always keep the most recent policy. Old ones don’t matter once a new one takes effect.